When free trade areas are set up the member countries trade with each other grows faster than their trade with other countries This is due to what economist call ?

Related Mcqs:

Increased foreign competition tend to ?

A. Intensify inflationary pressure at home B. Induce falling output per worker-hour for domestic workers C. Place constraints on the wages of domestic workers D. Increase profits of domestic import competing industries...

Government payments made to domestic firms in order to encourage exports are called ?

A. Side payments B. Tariffs C. subsidies D. export quotas...

The main cause of different relative costs between countries are ?

A. relative factor competition B. relative factor mobility C. relative factor substitution D. relative factor endowments...

Arguments for free trade are sometimes disregarded by politicians because ?

A. Maximizing domestic efficiency is not considered imports B. Maximizing consumer welfare may not be a chief priority C. There exist sound economic reasons for keeping one’s economy isolated from other economies D. Economists tend to favor high protected domestic markets...

To prevent the external value of the currency from falling the government might ?

A. Reduce interest rates B. Sell its own currency C. Buy its own currency with foreign reserves D. Increase its own spending...